Thailand
Asia-Pacific faces uphill recovery battle: Moody’s
While the US, China and Europe fast track their economic recoveries, Cambodia and other Asia-Pacific countries face a longer road back to pre-pandemic levels, according to a Moody’s Analytics report.
The report looked at several factors contributing to countries’ ability to rebound from the pandemic, including vaccine rates, exports and inflation.
Exports and Covid-19 containment measures were viewed as top indicators of which Asia-Pacific countries would recover first.
Moody’s data indicated that most countries in Asia-Pacific showed strong export growth in 2021. In Southeast Asia, Vietnam and Taiwan have eclipsed pre-pandemic export levels recorded in December 2019. While aggregate export data for Cambodia in 2021 is not available, accessible trade data points to an improving yet unpredictable recovery.
According to CEIC Data, Cambodia’s trade balance at the end of January 2021 showed a $939.9 million deficit. Pre-pandemic, in February 2020, the deficit stood at $513.7 million.
In encouraging news, exports to Japan showed an increase of 3 percent in Q12021 compared with the same period last year, while exports to Vietnam increased a staggering 443 percent in Q12021 over the Q12020 period. Garment exports, however, fell 6.43 percent in Q12021 year-on-year, according to Fibre2Fashion.
Generally contained inflation rates in Asia-Pacific were seen as a positive. Most countries in the region reported consumer price index (CPI) growth rates hovering at 2 percent or below.
According to CEIC Data, year-on-year CPI growth in Cambodia has decreased steadily, from 3.7 percent in October 2020 to 1.73 percent in February 2021.
Vaccination numbers, the reopening of borders and the return of tourism will also heavily factor into economic outlooks for countries in the region as it attempts to catch up with Europe, China and the US on the road to recovery.
As of May 23, 13.64 percent of the Cambodian population had received at least one dose, considerably higher than in neighbouring countries. Thailand’s rate stood at 2.93 percent. Malaysia’s rate was 5.14 percent.
The return of tourism and opening of borders will play a large role in how quickly Cambodia’s economy can fully recover. In 2019, tourism accounted for almost a third of gross domestic product (GDP). Revenue generated from tourism fell from $4.92 billion in 2019 to $1.02 billion in 2020.
“The greatest uncertainty, aside from the availability of vaccines and the emergence of new Coronavirus variants, is the reopening of international travel and tourism. Local retail, transport and other services cannot completely rebound until this occurs,” the Moody’s report said.
Overall, the Asian Development Bank predicts Cambodia’s GDP to grow by 4 percent in 2021, about three percentage points lower than its average pre-pandemic growth rate of 7 percent.
Source: https://www.khmertimeskh.com/50863215/asia-pacific-faces-uphill-recovery-battle-moodys/